The goal of "Nonprofit Conversation" is to provide a forum for discussion of nonprofit success and challenges. Bunnie Riedel (host) provides advice, observations and solutions for the nonprofit community. Guest bloggers will be invited to share their ideas and interviews will be conducted with nonprofit executives, board members and other experts in an effort to create a "conversation."

Friday, November 27, 2009

When I was younger and had no money, I would buy things on “lay-away.” You’d put a little down and then make payments but not get the product until it was paid in full. I got my first set of dishes that way, a little bit at a time. For the last twenty years, lay-away hasn’t existed but now with the economy in a slump, lay-away is back at some of the large stores.

In thinking about membership, so many organizations have lost members and are trying desperately to get them back. However, I have also seen a rigidity among nonprofits when it comes to membership dues and structure. Some nonprofits aren’t really understanding that doing business as usual will only continue to cause their membership numbers and dollars to fall. In normal circumstances, even when the economy is fabulous, nonprofit membership churn (or turnover) is roughly 20%-25%. In shaky times that number goes up by quite a bit.

Here are some ideas I’ve been noodling on lately:

Assess your current membership demographics. Where have you lost members? Are there certain types of people that are not renewing? Is there a way to bring them back by tailoring membership to their needs? For instance, let’s pretend that your organization is the National Tennis Enthusiasts Association (NTEA--a completely fictional association). Do you really know who your members are? Have you done demographic surveys of your membership?

Let’s pretend you have done those demographic surveys and you find the following:

20% of your members are under eighteen.25% of your members are nineteen to thirty-five.25% of your members are thirty-six to fifty.30% of your members are over fifty.

Approximately 40% of your members are female and 60% of your members are male.

75% of your members live in suburban communities and 25% of your members live in urban areas.

Now cross-reference: How many of your under eighteen year old members are female or male and how many live in suburban communities vs. urban areas.

And, what percentage of those sub-groups have you lost?

You see that you’ve lost 30% of your under eighteen year old female urban area members. What can you do to appeal to them? Could you create an online community directed at them, with the latest news about young urban female tennis champions? Secure discounts on equipment and clothing? Offer “buddy” membership where two can join for the price of one? Host a “Young Miss” event in their city? Have a tennis camp scholarship contest for members only?

Now you also see that you’ve lost 40% of your suburban male over fifty members. What strategies can you think of to reclaim that demographic? It certainly won’t be the same as you would use for the under eighteen year old urban females. The point is: if you lump all your members together in one big group without taking into consideration their unique qualities, you will continue to lose membership or at least be challenged to maintain members.

Assess your membership dues structure. What is the cost of membership? Has it remained constant over the last few years or gone up? I know of an organization that recently raised its membership dues, and I think that’s insane, given the economy. Now is the time to look at your membership dues and think about putting them “on-sale.”

But we’ll lose even more money!

I don’t believe you will. People are looking for bargains and looking to cut back on their expenses. You will gain more members if you discount your membership dues. Also, think how you can market the discount.

“We know that the economy is slow and we decided to lower our membership dues to make it easier for you. We don’t want you to miss having your member benefits.”

If you took 30% off your membership dues tomorrow what would that look like? How can you market that to members you’ve lost? Is there a “volume potential” for your organization?

For seriously lapsed members (say a year or more) think about providing them membership at half-price.

Find value-added partnerships. I just received notice from an association telling me that I can now buy at a significant discount at an office supply store because I am a member. What products do your members use all the time? Perhaps they need a discount on liability or theft insurance. Perhaps they need certain types of equipment. Maybe they need discounts on airfare. Once again, conduct a short survey. Ask your members what they need and then find a supplier or retail partner that will give them substantial discounts just because they belong to your association.

If I see that over the course of a year my membership will save me $300 through discounts, and that $300 more than pays the cost of my membership, then I have a strong incentive to become or remain a member.

Provide a payment plan. Just like lay-away, except your members get their product up front. My heating and cooling maintenance providers just sent me a notice saying we can pay for the service in “3 easy payments.” Could you offer your members “3 easy payments?” This could certainly affect your cash flow and how you budget, but isn’t that better than not getting the membership?

I heard an organization advertise that you can join them by making monthly payments. So instead of it costing $120 per year, it now costs $10 a month. That makes it much easier to swallow. Of course the best way to do this is to set it up as an automatic withdrawal from their bank account. That’s the way my gym does it.

Make sure you are providing value. If you are losing members right and left, maybe it’s time to think about your organization’s “value.” Not only are people spending less but they are also demanding high value in the things they buy. What is your value? How are you competing with other nonprofits of similar size or mission? Why should anyone join your organization? You can’t ask for membership dollars and then not deliver a product. If people don’t see any advantage in sending you money, they will stop sending you money.

I hope that this has given some of you food for thought. And I hope that all of you achieve and succeed in your membership goals!!!